Shake Shack returning entire $10 million Paycheck Protection Program loan
Shake Shack on Sunday night announced it will be returning the $10 million federal loan it received that was intended for small businesses.
The fast-casual burger chain received the money from the Paycheck Protection Program, which set aside $349 billion to help small businesses pay their workers during the coronavirus pandemic. The program stipulates that if businesses bring back their furloughed and laid-off workers by June, the loans will be forgiven. The PPP started less than two weeks ago, and has already run out of money.
Last week, Shake Shack announced it had furloughed or laid off more than 1,000 employees. The chain also said it has $112 million cash on hand and is spending between $1.3 million and $1.5 million per week. Shake Shack has 189 locations in the United States, and in a statement, Danny Meyer, Shake Shack founder and CEO of Union Square Hospitality Group, and Shake Shack CEO Randy Garutti said they applied for a loan because they were open to any individual restaurant with no more than 500 employees.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"The PPP came with no user manual and it was extremely confusing," Meyer and Garutti said. Because Shake Shack and Union Square Hospitality Group had already furloughed and laid off workers, they thought "the best chance of keeping our teams working, off the unemployment line, and hiring back our furloughed and laid off employees would be to apply now and hope things would be clarified in time."
Meyer and Garutti said they will "immediately return the entire $10 million," now that they are aware "the first phase of the PPP was underfunded and many who need it most haven't gotten any assistance." They called on Congress to do something to make sure "all restaurants, no matter their size, have equal ability to get back on their feet and hire back their teams."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Catherine Garcia has worked as a senior writer at The Week since 2014. Her writing and reporting have appeared in Entertainment Weekly, The New York Times, Wirecutter, NBC News and "The Book of Jezebel," among others. She's a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.
-
'Wolf Hall: the Mirror and the Light' season two – still a "crown jewel"
The Week Recommends Damian Lewis and Mark Rylance star in this 'superlative' Tudor drama on BBC One
By Adrienne Wyper, The Week UK Published
-
'Election Day. Finally.'
Today's Newspapers A roundup of the headlines from the US front pages
By The Week Staff Published
-
Incendiary device plot: Russia's 'rehearsals' for attacks on transatlantic flights
The Explainer Security officials warn of widespread Moscow-backed 'sabotage campaign' in retaliation for continued Western support for Ukraine
By The Week UK Published
-
US economy still strong in final preelection report
Speed Read It grew at a solid 2.8% annual rate from July through September
By Peter Weber, The Week US Published
-
Boeing machinists reject deal, continue strike
Speed Read The rejection came the same day Boeing reported a $6.2 billion quarterly loss
By Peter Weber, The Week US Published
-
Ports reopen after dockworkers halt strike
Speed Read The 36 ports that closed this week, from Maine to Texas, will start reopening today
By Peter Weber, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published